BP fined $2.5 million over trades

NEW YORK -- The New York Mercantile Exchange said on Monday it fined British oil major BP $2.5 million for questionable crude oil trades in 2001 and 2002.

The disciplinary action came after allegations including wash trading, exemptions from position limits for hedging bona fide transactions, and conduct detrimental to the interests and welfare of the exchange. The trades in question occurred in January 2001 and August 2002, Merc, the world's largest energy trading house, said.

BP, which is the world's third largest listed oil company with a market capitalization of more than $150 billion, settled with Merc for the full amount without admitting or denying the allegations, Merc said. BP did not immediately return phone calls about the settlement.

The exchange's board of directors accepted the settlement at its monthly meeting on Sunday.

In July, BP's power marketing arm settled with the Federal Energy Regulatory Commission, agreeing to give $3 million to a state low income energy fund to settle a charge that it manipulated California's electricity market in 2000-01.

FERC and CFTC are trying to clean up trading in natural gas and wholesale electricity

BP's takeover of U.S. firms Amoco and Arco in the late 1990s sparked concerns from antitrust bodies as it handed the company a substantial portion of storage facilities in Cushing, Okla., the delivery point for Merc's sweet crude contract.